Concerned about Debt

[Dayanara]

My hubby and I were looking over his finances (mainly debts) for when he comes up here.

He sadly has approx 28-30K in debt (mostly school loans) and has been struggling to pay it back for years. He sadly cannot declare bankruptcy as he co-signed about 20k of that with his parents.

Now, I know this is nor morally right, and not saying we are going to do it, but I do want to know the consequences in case it becomes our only option. If he was to stop paying the loans/credit cards that are not co-signed (we do not want to screw his parents over so will continue paying those off) would this come back and haunt him in Canada? Also not paying last month utility bills, would those haunt him too?

I hate even thinking about this as an option, doubt we will do it just because I would feel like crap...but I want to know what might happen, even if we were late paying some of it.

Thanks.

 

[sbwv09]

Hey Dayanara, I'm in the same situation. I don't know if you can abandon federal loans... I got mine postponed for a year by saying I have financial need. Maybe you can do that for some of the loans until you get on your feet in Canada. I know for credit cards and stuff, if you abandon them, there is a statute of limitations. It varies per state, but basically after that is done they can't take action against you. The only bad thing would be if you had to return to the US for whatever reason before that time period passed.

I'm trying to get with some debt councilors to get lower payments. I have a 5000 credit card and they want over 200 a month minimum payment. That is just wrong.. my SIL here has the same but her minimum is 60 dollars!

But basically... it won't affect your credit in Canada. He'll start out with a 0 rating regardless.

 

[minna]

well - I think it is good to consider ALL the options, which includes knowing what happens if you can't pay.

From what I know, your husband's american credit score would not affect his Canadian credit score - they are pretty much separate.

When I first moved to the US, I had to pay all kinds of additional deposits etc to open utility accounts because I did not have a credit history in the US. I also had to pay an extra security deposit for the apartment I was renting - and I had an excellent Canadian credit score at the time.

BUT - I don't know if a bankruptcy in another country might pop up in the future if you guys decided to, say, get a mortgage in the future. There may also be cases where he is asked about past debts/bankrupticies, and where disclosing might affect his ability to do what he wants to do.

For me, however, my biggest concern about walking away from debt would be for in the case that he ever decided to return to live in the US. I mean, it's hard to predict the future, and maybe in 15 years, one of you might get an amazing job offer in the states, or something similar, and his debt problems might make that transition back to the US more difficult....

 

[Dayanara]

Thanks for the help so far guys. I know we will end up paying it all, but just nice to hear that it will not affect his credit score here (which I gather from other threads I have read). I just don't want it to haunt him if we are a month or two late paying some of it, we are just getting on our feet right now. Just bought a condo (he is not on the mortgage obviously) and will be living off my pay only for the first little while until he can work, so my heart is just sinking since I have my own debts to take care of too.

 

[sbwv09]

You can use this to your advantage. Since he won't be in the US, his credit rating won't count, at least for awhile. Let it go to collections and make a deal with them. You can pay a lot less than what you owe and once it's paid off the credit rating will be ok again.

 

[tgchi13]

You can use this to your advantage. Since he won't be in the US, his credit rating won't count, at least for awhile. Let it go to collections and make a deal with them. You can pay a lot less than what you owe and once it's paid off the credit rating will be ok again.

A couple of things...in the US there are agencies through which you can negotiate your debt down - take advantage of that.

It will not effect his Canadian credit.

The US credit is going to be effected regardless, unless it's an account that is maintained and in good faith (luckily for us we in a position to make payments on my husband's credit and store cards so his credit was maintained when he had to return). If he has to return during the statute of limitations, then there will be a negative effect. If he has to return after that, then he will start back at zero and have to rebuild his credit.

I'm not explaining this well, but I'm a controller not a teacher, sorry.

 

[BeShoo]

If he's out of work, he can get his school loans deferred. My partner is in that situation.

I only worry that CIC may think he is coming to Canada to abandon his debt, rather than to be with me. We fully intend to pay all that debt, once things are stabilized.

 

[tgchi13]

How would CIC know to check if he is abandoning debt?

 

[SaugaBoss]

if it makes u feel better im in almost 65,000 debt yaay??? NOT!

have an awesome job free trips to NY and London but miss my husband and going to wait it out in Canada and be broke and not work

 

[wmaitner]

About that statute of limitations thing, they can sue you for the amount owed.. Once you are sued for it, forget about a statute of limitations, that judgement lasts forever..

 

[BeShoo]

How would CIC know to check if he is abandoning debt?

Well, I hope they won't. I have to be careful about what I say in our relationship history. I paid rent and utilities for the better part of a year because he couldn't afford it. I also had to send him money for food when the food stamp people were uncooperative. I opened a U.S. bank account but I didn't make it a joint account because I was afraid he'd be denied due to his credit history and the fact that he got his own account closed by the bank when he didn't pay back an overdraft. The sooner we can pay back the bank for that overdraft, the better as far as I'm concerned. I don't think that any of this would be good to mention in the application.

 

[tgchi13]

About that statute of limitations thing, they can sue you for the amount owed.. Once you are sued for it, forget about a statute of limitations, that judgement lasts forever..

The Statute of Limitations is regarding the time allowed to pursue a law suit.

 

[tgchi13]

if it makes u feel better im in almost 65,000 debt yaay??? NOT!

have an awesome job free trips to NY and London but miss my husband and going to wait it out in Canada and be broke and not work

How can you have an awesome job that allows you free trips to NY and London and not work?

 

[tgchi13]

Well, I hope they won't. I have to be careful about what I say in our relationship history. I paid rent and utilities for the better part of a year because he couldn't afford it. I also had to send him money for food when the food stamp people were uncooperative. I opened a U.S. bank account but I didn't make it a joint account because I was afraid he'd be denied due to his credit history and the fact that he got his own account closed by the bank when he didn't pay back an overdraft. The sooner we can pay back the bank for that overdraft, the better as far as I'm concerned. I don't think that any of this would be good to mention in the application.

Unless the application has changed dramatically, detail to this extent will not come up.

 

[kelKel]

Tgchi I think she meant she currently has an awesome job but is giving it up to wait it out in Canada and be broke and not work